Oriental Insurance Company Ltd v Bhavani Stores Pte Ltd

CourtCourt of Three Judges (Singapore)
Judgment Date29 October 1997
Date29 October 1997
Docket NumberCivil Appeal No 38 of 1997
Oriental Insurance Co Ltd
Bhavani Stores Pte Ltd

[1997] SGCA 47

Yong Pung How CJ


M Karthigesu JA


L P Thean JA

Civil Appeal No 38 of 1997

Court of Appeal

Conflict of Laws–Choice of jurisdiction–Multi-jurisdictional–Application for stay of proceedings–Burden and standard of proof–Whether there was such thing as higher burden where jurisdiction founded as of right–Whether any distinction in standard of proof between cases where court exercised discretion to grant jurisdiction over foreign party and cases where court decided whether to grant stay where jurisdiction founded as of right–Order 11 The Rules of Court 1996–Conflict of Laws–Choice of jurisdiction–Multi-jurisdictional–Stay of proceedings –Appropriate forum–Factors accounted for–Governing law of contract –Whether express choice of jurisdiction clause existing–Places of business of parties–Factors pertaining to underlying contract–Location of witnesses–Whether dispute questions of law or fact–Whether stay would deprive legitimate personal or juridical advantage

The respondent (“BSPL”, the plaintiff below) was based in Singapore. It arranged for cashew nuts to be shipped from Bissau to Tuticorin in India. The appellant (“Oriental”), who insured BSPL's shipment and discharge of the shipment, was based in India. There was a shortfall of nuts, which was allegedly caused by the stevedores during the offloading process, when they were delivered in India, and BSPL brought this suit in the High Court. The factual dispute between the parties was whether the loss was an insured interest or otherwise. Oriental filed a defence and applied for a stay of proceedings, arguing that the action should be tried in India. The judge refused to grant a stay.

Held, allowing the appeal:

(1) It was a confusing argument to contend that where a plaintiff had established jurisdiction as of right, a higher burden was demanded of the defendant than where jurisdiction was granted other than as of right. The reasons were these: first, it was patently clear that where the court had jurisdiction as of right, the burden of proving that another forum was more appropriate always fell on the defendant. Where, however, the court's jurisdiction was premised on O 11 of The Rules of Court 1996, the burden of proving that Singapore was the appropriate forum fell on the plaintiff and this remained the case even when the defendant who was served out of jurisdiction came to Singapore to contest the jurisdiction of the Singapore court. If the burden fell in one type of case on the defendant and in the other type of case on the plaintiff, the court failed to appreciate the argument that the defendant had a “higher” burden where jurisdiction was founded as of right: at [16].

(2) There was no reason why there should be any distinction in the standard of proof between cases where the court was exercising a discretion to grant jurisdiction over a foreign defendant and cases where the court was deciding whether to grant a stay where jurisdiction had been founded as of right. In O 11 cases the burden of proof rested on the plaintiff, whereas in the forum non conveniens cases that burden rested on the defendant - the effect was not merely that the burden rested on the plaintiff to persuade the court that Singapore was the appropriate forum for the trial of the action, but that he had to show that this was clearly so. In other words, the burden was the obverse of that applicable where a stay was sought of proceedings started in this country as of right: at [21] and [22].

(3) Oriental had the burden of proving that India was the forum with which the dispute had the most “real and substantial connection”. It had to show that Singapore was not the natural or appropriate forum and that India was the forum clearly or distinctly more appropriate than Singapore. Once it had discharged that burden, the court had to grant a stay unless BSPL could highlight some personal or juridical disadvantage which would result: at [24].

(4) Regarding the issue of natural forum, the only connections to Singapore suggested by BSPL were that it was its place of business, claims were payable optionally in Singapore under the policy, and Oriental had a registered office in Singapore. None of these factors were conclusive and were, by and large, neutral in character. The persuasive factors, namely, that the place of discharge of the goods was India and the basis for BSPL's claim was that defective discharge of the goods in India was an insured risk, pointed away from Singapore: at [38].

(5) The main dispute was over a question of fact, namely, whether there was spillage (in which event the appellants were liable to the proven extent of the spillage) or whether there was drying (in which event the appellants were not liable under the policy). The witnesses who were able to establish which version of the facts was correct were predominantly in India. As such, a stay of proceedings should be granted, subject to BSPL proving that it would suffer undue disadvantage. In this regard, BSPL had not highlighted any disadvantage which was so significant that it could justify importing the whole body of evidence from India to Singapore for trial: at [38], [40], [41] and [48].

Abidin Daver, The [1984] AC 398; [1984] 1 All ER 470 (refd)

Brinkerhoff Maritime Drilling Corp v PT Airfast Services Indonesia [1992] 2 SLR (R) 345; [1992] 2 SLR 776 (folld)

Eng Liat Kiang v Eng Bak Hern [1995] 2 SLR (R) 851; [1995] 3 SLR 97 (folld)

Hooghly Mills Co Ltd, The v Seltron Pte Ltd [1994] 3 SLR (R) 757; [1995] 1 SLR 773 (distd)

Rockware Glass Ltd v MacShannon [1978] AC 795 (refd)

Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 (folld)

Companies Act (Cap 50, 1994 Rev Ed) s 387

Rules of Court1996, The O 11 (consd)

Danny Chua and Magdalene Chew (Khattar Wong & Partners) for the appellant

Lawrence Quahe (Harry Elias & Partners) for the respondent.

Yong Pung How CJ

(delivering the judgment of the court):

1 This was an appeal against an order of Goh Joon Seng J affirming the assistant registrar's decision not to grant the appellants a stay of Singapore proceedings [see Bhavani Stores Pte Ltd v Oriental Insurance Co Ltd [1997] SGHC 101]. The appellants are defendants to an action initiated by the respondents in Singapore for moneys allegedly owed to them by the appellants under various insurance policies. The appellants argued that Singapore proceedings should be stayed on the basis that India was clearly the more appropriate forum.


2 The respondents are a trading company and shippers based in Singapore. They arranged for 5,742.521mt of raw cashew nuts (packed in bags) to be shipped from Bissau, Guinea Bissau to Tuticorin, India, to be delivered thereafter to various consignees in India.

3 The appellants are an insurance company incorporated in India. They insured the shipment from Bissau to Tuticorin and the discharge of the shipment at Tuticorin under various policies (each relating to a different consignee).

4 5,768.216mt of raw cashews contained in 81,942 gunny and polypropylene bags were loaded on mv Bahania Reefer at Bissau from 17 July to 2 September 1995. The ship sailed on 6 September 1995 and arrived at Tuticorin on or about 30 September 1995.

5 The goods were inspected on ship by surveyors Seascan Services Pvt Ltd of Tuticorin on 1 October 1995.

6 The discharge of the shipment was effected from 1 October to 8 October 1995. Offloading was done by stevedores using hooks and rope lines. Delivery was thereafter made to the various consignees.

The dispute

7 It was alleged that in the process of offloading, the hooks used by the stevedores tore the bags containing the nuts and some spillage took place. The appellants said that they arranged for the spillage to be swept up, packaged in 1,802 bags and delivered to the consignees in their respective proportions.

8 The respondents alleged that as a consequence of the spillage, there was a shortfall of 408.315mt of nuts which was worth, at the contract price, US$536,803.45. They claimed that as spillage was an insured risk, the appellants were liable under the insurance policies to compensate them for their loss. The amount asked for by the respondents was US$461,541.70, being the value of the shortfall less 1% the total value of the bills of lading. This computation was based on the terms of the contract. The respondents brought a suit in the High Court. The appellants filed a defence and then applied for a stay of proceedings on the basis that the action was more suitably tried in India.

9 The appellants' defence was two-pronged. They said firstly that the shortfall was not attributable to the spillage as the spilt nuts were swept up and delivered to the consignees. As a consequence, any spillage not swept up was minimal. Secondly, they claimed that the shortfall was attributable to drying...

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